BCD Travel's 2007 Annual Client Benchmark survey presents a generally optimistic view of the business travel industry.
Travel is at an all time high – indeed the industry is almost a victim of its own success with increased demand putting stress on availability and forcing prices up. This is most marked in the hotel sector.
But while there are fewer companies (48% compared with 56% in 2006; the figure from EMEA was 49%) saying their travel budget has increased, many are saying they are doing more trips and have more travellers.
This is a comprehensive study looking at issues ranging from the big spend areas of air and hotels to car and rail spend, global consolidation, online adoption, charge cards, expense automation, meetings management and corporate social responsibility (CSR).
But one thing that emerges quickly from the 47-page report is that procurement and finance are taking an increasingly tight hold on travel management and – this is the obvious corollary – companies are still aiming to cut costs and save money.
69% of companies now report on travel to these two departments compared with 59% last year.
For the third year running, the top goal of the companies in terms of travel was to reduce the budget.
The next two aims are to communicate more effectively with travellers and management and to negotiate more effectively with suppliers.
The fourth aim, up from sixth in 2006, is to establish online booking. So two of the top four have the ulterior aim of cutting costs.
Traveller security or CSR do not appear in the top ten.
The main way savings are being achieved (55%) is by "cost avoidance", followed by incremental savings (50%) and savings through negotiations (48%).
One cost avoidance area is the increased use of web, tele- or video conferencing where 18% of companies now use this compared with 13% in 2006.
Another area where BCD finds corporates are focusing is travel policy compliance. The TMC said the survey "marks the first time in three years that mandating travel policy has ranked as the number one policy change."
It adds: "This indicates that corporates are becoming stricter in their efforts to police policy adherence and implementing procedures that penalise non-compliance.
"Such measure may include requiring pre-trip approval and not re-imbursing out-of-policy expenses."
But while this may work with the air and car rental programmes, corporates are less successful with hotels.
Both air and car rental programmes have high compliance. While air compliance is more than 70% and car rental more than 80%, hotel compliance lags behind at 60%.
BCD says the hotel compliance "continues to present a major challenge for survey respondents."
Rates are back to pre-9/11 levels and some markets, like London and Amsterdam are at almost full occupancy with demand outpacing supply.
But corporates took a fairly relaxed view. 47% said their hotel programme was “encouraged not mandated” although 12% now do mandate compared with 9% in 2006. But BCD added: “Only 46% …reported that their policy required hotel booking through the preferred agency channel.”
52% of American respondents said that 60% or more of their hotel bookings were made through the agent or online but in Europe only 45% made this claim.
While 15% of American companies said that fewer than 40% were made through an agent or online, the figure for Europe was 42%.
BCD said that the hotel negotiations for 2007 proved difficult with some hotels turning down volume in favour of higher rates from the transient market.
It added that Advito (its consulting arm) said "dynamic pricing had surprisingly little impact, appearing in only 5% of BCD Travel clients' offer and accepted in only 2% of the contracts.
"The expectation - created by the hotel industry - that more hotels would require a market driven, fluctuating rate structure did not materialise."
Elsewhere, BCD found that expanse management was growing, global consolidation expanding, the use of corporate charge cards increasing and in Europe if not in most of the rest of the world, the use of rail travel was also growing.
But one area where there is cause for some disappointment is in CSR. There has been a big push by organisations like the Association of Corporate Travel Executives and the UK and Ireland Institute of Travel Management to raise the awareness of this issue.
BCD found that only 50% of the respondents had a policy on CSR but in only 23% of them did it cover travel.
* BCD questioned 219 of its clients worldwide with the bulk - 78% - having an annual air spend of between €756,000 and €22.6m.